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If you are a marijuana business, regardless of whether you are operating within state law, you have major tax and banking headaches. Banking and most tax laws are governed by Federal law, which deems these activities illegal. One challenge commonly faced by marijuana businesses is the lack of access to the banking system, because banks don't want to deal with businesses illegal under federal law.

Without banks, dispensaries pay the government in cash, but face a penalty for the cash payments. This situation highlights the hypocrisy of the government's tax and drug policies, requiring payment on the one hand, punishing you for paying on the other. A recent case filed in U.S. Tax Court by a Colorado dispensary, Allgreens LLC, is the most recent challenge to this Catch-22 created by the government. Unfortunately, the IRS is probably going to win because it is just following the letter of the law here - a change to the tax or the drug laws is necessary for a fix.

If you are a marijuana business, regardless of whether you are operating within state law, you have major tax and banking headaches. Banking and most tax laws are governed by Federal law, which deems these activities illegal. One challenge commonly faced by marijuana businesses is the lack of access to the banking system, because banks don't want to deal with businesses illegal under federal law.

Without banks, dispensaries pay the government in cash, but face a penalty for the cash payments. This situation highlights the hypocrisy of the government's tax and drug policies, requiring payment on the one hand, punishing you for paying on the other. A recent case filed in U.S. Tax Court by a Colorado dispensary, Allgreens LLC, is the most recent challenge to this Catch-22 created by the government. Unfortunately, the IRS is probably going to win because it is just following the letter of the law here - a change to the tax or the drug laws is necessary for a fix.

The LA times published an interesting article about marijuana dispensaries operating in Los Angeles. The article focuses on the interesting fact that as Los Angeles tries to clamp down on the number of marijuana dispensaries operating in Los Angeles by making them follow Proposition D requirements, more than 450 medical marijuana shops filed business tax renewals with the Office of Finance. This number is more than three times as many stores than what is estimated to be allowed to stay open. So while local lawmakers are troubled by the number of medical marijuana shops that still exist in Los Angeles, the Office of Finance has no problem cashing in on all the taxes being collected from them. The article states that Los Angeles collected roughly $2.1 million from medical marijuana tax renewals this year, an Office of Finance staffer told a City Council committee Monday.

The interesting thing about this article is that City Council is upset that these people are paying business taxes…

The LA times published an interesting article about marijuana dispensaries operating in Los Angeles. The article focuses on the interesting fact that as Los Angeles tries to clamp down on the number of marijuana dispensaries operating in Los Angeles by making them follow Proposition D requirements, more than 450 medical marijuana shops filed business tax renewals with the Office of Finance. This number is more than three times as many stores than what is estimated to be allowed to stay open. So while local lawmakers are troubled by the number of medical marijuana shops that still exist in Los Angeles, the Office of Finance has no problem cashing in on all the taxes being collected from them. The article states that Los Angeles collected roughly $2.1 million from medical marijuana tax renewals this year, an Office of Finance staffer told a City Council committee Monday.

The interesting thing about this article is that City Council is upset that these people are paying business tax…